As the Trump trade wars continue, one has to wonder if Trump will be responsible for starting actual wars. He has, after all, threatened to take control of both Greenland and the Panama Canal by force, if necessary, not to mention continuing to refer to Canada as the 51st state. Given the devastation Trump has wrought upon the world economy with his idiotic trade war and the utter disdain he has shown towards NATO, no one should underestimate his ability to act upon his imperialist rhetoric. This is particularly true when he has Pete Hegseth, of Fox News fame, as the Secretary of Defense who will do whatever Trump tells him to do – legal or illegal with respect to domestic and international law.
In a recent Cabinet meeting, Hegseth, who was obviously playing to an audience of one, Trump, said that he had reached a deal to ‘partner’ with Panama that would allow the presence of more U.S. troops in Panama and allow U.S. ships to transit the canal ‘first and free.’ Those last words are particularly interesting if Hegseth is to be believed, although his credibility is already shredded due to the recent ‘Signalgate’ scandal.
First, the idea that U.S. ships will pass through the canal for ‘free’ violates the neutrality treaty under which the canal has operated since Panama took control of it at the end of 1999. There is another major problem with this statement if it is true. Panama brings in about $5 billion/year from the canal. Currently, the United States accounts for two thirds of the cargo shipped through the Panama Canal. It is also a fact that most cargo ships are not registered as U.S. ships. The top countries for ship registrations are Panama, Liberia and the Marshall Islands but also include Cyprus, Cayman Islands, Greece, Malta, and the Bahamas.
When Hegseth said that American ships would move through the canal ‘first and free’ was he only referring to U.S. Navy ships which would be a much smaller percentage than all the cargo ships associated with U.S. trade? If, however, he was referring to all ships associated with U.S. trade regardless of their official registration, that presents a huge problem. That would mean $3 billion dollars would disappear from the Panamanian economy and severely impact their ability to maintain and operate the canal. That clearly makes no sense.
If the thinking is that Panama would jack up the rates for the remaining ships to make up the difference, that also presents a huge problem. After the United States, China and Japan are the two countries that ship the most cargo through the canal. Does anyone really believe they will just accept this situation? Does anyone believe Panama would accept such an arrangement? I certainly don’t. China would likely view such an arrangement as a major provocation and possibly even an act of war. The financial consequences to both Panama and Japan could be devastating. Frankly, I think the rest of the world would also vehemently object to such an arrangement.
Just like the trade war that Trump started, it is difficult to see how there are any winners from such an arrangement. It will cost the US money to station more troops in Panama and they are likely to be not very welcome by the Panamanians. Will it be the start of another Vietnam or Afghanistan? Allowing all ships supporting U.S. trade to transit the canal for free would have a huge negative impact on the Panamanian economy. In the end, the United States will lose. Panama will lose. And every country in the world who uses the Panama Canal will lose. Just like the trade war, there will be no winners. But the MAGA spin machine will be working overtime to try to convince everyone that Trump’s stupidity is yet another act of pure genius. I wonder how they will spin it if a real war starts, and body bags start coming home? Time will tell.
People are always admonished to not allow children to play with guns. Unfortunately, we now have an egomaniacal, man-child in the White House who views the world’s most powerful army as his new toy. What could go wrong?
